UK - Returns on index equity funds do not justify their risk when compared to corporate bonds, Isis Asset Management maintains.
Chief investment officer Robert Talbut says average returns on equities are expected to be 6-7% over the next few years.
But he points out that a fund with weightings in both high-yield and investment grade bonds is likely to make the same returns at less risk.
He calculated that such bond funds could be constructed to have a quarter of the risk of an index equity fund.
He explained: “Put simply, if the index isn’t going to generate significant gains over bonds then you should own less of it.
“Themes like ‘value’ and ‘growth’ investing have had their time.
“We’re now entering a period which will be looked back on as a ‘golden age’ for stock pickers where avoiding the markets laggards proved to be just as important as picking the winners.”
He added: “When equity markets are characterised by modest average returns but high levels of year-on-year volatility, they become the preserve of more aggressive investors aiming to return substantially more than the bond markets.”
Life expectancy in the UK saw no improvement between 2015 and 2017 as the number of people aged over 90 hit a record high, latest Office for National Statistics (ONS) data reveals.
Self-administered pension funds spent £14bn on payments to pensioners in Q2 2018, but only received £11.4bn of contributions (net of refunds), latest Office for National Statistics (ONS) data reveals.
The Pensions and Lifetime Savings Association (PLSA) has named the 17 members of its inaugural policy board after a competitive application process with 60 candidates.